Select Committee on Foreign Affairs Appendices to the Minutes of Evidence - Sixth Report


Memorandum submitted by Rio Tinto Plc


  Rio Tinto plc has been invited to submit evidence to the Committee "setting out as far as is possible the company's previous interests and activities in, and the reasons for its withdrawal from, the region".

  Rio Tinto plc is pleased to be able to assist the Committee and submits the following evidence.


  In the early 1990s, Rio Tinto established an office in Moscow and set about identifying and evaluating the most attractive business development opportunities in the Former Soviet Union.

  A large number of prospects were considered in Russia itself but few were of interest and those that were, were not offered on satisfactory legal and other terms. The company also considered two significant businss opportunities in Central Asia:

      (1)  Exploration around and/or expansion of the Murantau gold mine in Uzbekistan.

      (2)  Development of the Vasilkovskoye gold deposit Kazakhstan.


  In 1996, Rio Tinto entered into a three-year technical collaborative agreement with Uzbekhistan's State Committee of Geology and Mineral Reserves. The purpose of the agreement was to assemble and analyse geological data about the area around the Muruntau gold mine. Rio Tinto also established a representative office in Tashkent to support this project.

  Progress under this agreement was slow, mainly because much of the required data was classified and could not be released. However, information began flowing more freely in 1998. Once data had been assembled and target areas visited it became clear that there had been saturation exploration around the deposit which precluded the possibility of the discovery of another Muruntau size deposit at shallow depths.

  Discussions with the Government of Uzbekistan about a joint venture to expand Muruntau also failed.

  In 1998, Rio Tinto closed its representative office in Tashkent. The collaborative agreement expires shortly and will not be renewed.


  Rio Tinto first entered into discussions with the government of Kazakhstan about the development of the Vasilkovskoye gold deposit in late 1992.

  In March 1995, the Government of Kazakhstan put Vasilkovskoye out to international tender. The tender was being organised by the Government's advisors, Morgan Grenfell, and funded by the European Bank for Reconstruction and Development.

  In April 1995, it was announced that the Government of Kazakhstan had reached agreement with a Canadian mining company to develop Vasilkovskoye. This agreement was reached outside the tender process. Ultimately, the Canadian company was forced to relinquish its interest Vasilkovskoye.

  In 1996, the Government of Kazakhstan sought to put Vasilkovskoye out to tender again. Rio Tinto did not participate in this tender.

  The Vasilkovskoye deposit remains undeveloped.


  Rio Tinto can only carry out exploration in countries which offer both the potential for world-class mineral resources and an acceptable investment climate. Neither Kazakhstan nor Uzbekistan offered the latter.

March 1999

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